Top Lawyer Bailed Before Tenet Tanked

"It's a wonder that any health care company stays afloat," the trade publication House Counsel wrote in a May/June 2000 issue featuring Sulzbach on the cover. But "somehow, Santa Barbara-based Tenet has thrived."

Despite a powerful endorsement from Institutional Shareholder Services, which accused the incumbent board of showing "brazen indifference" for shareholders, Pearce's dissident team picked up only half of the votes that it needed. More than two years would pass, with Tenet insiders reaping millions on well-timed stock sales, before the stock came crashing down.

Barbakow claimed that he -- and even the executives he quickly fired -- had committed no wrongdoing. But Pearce holds Tenet's senior management anything but blameless.

"Did Ms. Sulzbach, or anyone in management or on the board, ever question how it was possible to legally and ethically do so much profitable business?" he asked. "Grounds may exist for shareholders to demand the return of some or all of Mr. Barbakow's bonus payment and gains from stock option exercise, and they may similarly make demands on other corporate officers and all directors who have sold stock in the last three years."

In 2000 -- the year before Sulzbach cashed in -- Tenet insiders sold around $3 worth of stock for every $1 they spent investing in the company. In 2001, they sold $100 worth of stock for every $1 they spent. And in 2002, when Barbakow executed his big sale, they cashed in $275 for every dollar they invested.

According to Tenet's latest proxy, Sulzbach owns fewer than 13,000 Tenet shares -- a fraction of the number she sold in 2001 -- although she still has the option of purchasing 312,500 more.

Tenet stock has lost 72% of its value since scandal engulfed the company last year.

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